FSCS declares more than 20 advice firms in default between May and October

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FSCS declares more than 20 advice firms in default between May and October

The UK's Financial Services Compensation Scheme (FSCS) has declared 45 firms in default between May and October 2020, including more than 20 financial advisers and planners.

Among the firms to have gone into default is advice firm Capital & Income Solutions, which went into liquidation on 17 January after losing pension transfer permissions in June last year.

According to the Statement of Affairs document found on the firm's Companies House entry, the firm lost £2.5m from 29 August 2017 to the date it wound up almost 18 months later.

Because these firms are unable to pay back the money they owe their customers, FSCS can step in and pay them compensation."

The FSCS has received more than 600 claims following the collapse of the firm and has so far paid out £1.2m in compensation.

Swansea-based adviser firm S&M Hughes, which trades as Crescent Financial, was also included on the list after entering liquidation last year.

In August, the FSCS said it was accepting claims against the firm regarding the poor pension transfer advice it had given to British Steel workers.

Crescent was one of a number of firms that advised its clients to transfer out of their defined benefit pension into a defined contribution pension.

Also on the list was collapsed SIPP operator Guinness Mahon, which entered into administration on 17 February after a raft of complaints about non-standard investments in its SIPPs.

It was sold to Hartley Pensions in February, which was concluded by administrators Smith & Williamson. The sale included around 4,000 SIPPs previously administered by the failed firm.

So far, the FSCS has received 961 claims against Guinness Mahon, all of which were pensions-related and the vast majority were SIPP claims.

FSCS chief executive Caroline Rainbird said: "Because these firms are unable to pay back the money they owe their customers, FSCS can step in and pay them compensation. As chief executive, I see first-hand the important role FSCS plays to help people who have lost money through their dealings with financial services firms that have failed or are no longer trading.

"The impact of their financial loss shouldn't be underestimated. People who claim through FSCS are often vulnerable. We treat each person with empathy and understanding as their claim is progressed."

In no particular order, these were the financial advice firms declared in default: 

Kingsway Wealth Management Limited

Marshall James & Company Financial Management Services 

Acorn Financial Solutions (Wessex) Limited        

Financial Solutions Midhurst Limited

Halebarns Financial Planning Ltd

JP Financial Management Ltd

Kingfisher Financial Strategies Limited

Opes Financial Planning Ltd

O'Toole & Associates LLP

Multicorp Rose Limited

R J Boorer and Associates Limited

S & M Hughes Limited

Square Seven Financial Planning LLP

A Luckhurst & N Shaw

Baronworth (Investment Services) Limited

Connected Financial Services Ltd

DNG Financial Solutions Limited

Mulbury Hamilton Financial Management Limited

Wellington Financial Management Limited

This article was first published by our sister title Professional Adviser